How To Add Value To Calves

Fri, 2010-07-02 12:48

Let’s look at some proven cost-management practices that add value to calves.

Lot size. Studies show larger
lots add value. Kansas State University found calves sold in a 22-head lot garnered a $2/cwt. premium over single calves, and a group of 80 head brought a $5.50/cwt. premium.

Health. Studies clearly show preconditioning nearly always pays dividends. A Colorado State University study revealed a $6.50-8.00/cwt. premium for VAC-45 calves (fully preconditioned and weaned
45 days) between 2005 and 2007. The premium was only $3.66/cwt. in 2000.

Weight. When I hear someone say his calves “topped” the sale, I wonder if he’s bragging or complaining. Those calves might garner
$127/cwt., but if the per-head price was only $475/head because the calves averaged 375 lbs., that’s not so good. If that producer’s cost of production is $580/cow/year, he
actually lost $105/head.

Pounds still pay, and pounds added economically pay the best. It’s easy to add weaning weight – creep feed from birth and/or have huge cows – but it’s harder to do so economically. A 1,200-lb. cow that weans a 550-lb. calf at $118/cwt. for a total of $649 will pay more bills than the $127/cwt. sale topper.

Another way to add weight is to background/precondition at the farm of origin. We have herds achieving
3 lbs./day gain in a 70-day backgrounding period with a $44/cwt. cost of gain (COG). Thus, that 550-lb. calf now weighs 760 lbs.; at $113/cwt., that calf brings home $859. Subtract the $92.40 to add the 210 lbs., and you added $117.60 value to the calf for owning him those 70 days.

The keys to maximizing profit are excellent herd health (we have numerous herds with less than 0.25% death loss and less than 2% sickness during backgrounding/preconditioning), low-cost feed (co-products work very well) and excellent genetics.

Some studies indicate that pasture-based preconditioning may be viable for some herds. Five-weight calves weaned onto high-quality pasture may have a more economical COG compared to more traditional grain-based programs. Gains of 1.0-1.5 lbs./head/day can be
expected on high-quality pasture, and most studies show calves have a lower morbidity rate than when they are on drylot preconditioning.

Retain ownership. If you’ve purchased high-quality bulls that sire low birthweight, excellent growth, moderate milk, moderate frame, excellent disposition and
superior carcass, why not retain ownership through the feedlot of at least a portion of the calves? CattleFax data show this is a positive financial move in most years.

Or, add value to the heifer calves from these top genetics by selling the spring heifers in the fall as potential replacements, or add even more value by breeding them AI to proven, calving-ease bulls the following spring. The key is to know your cost of production.

Sell freezer beef. With the increased interest in buying food
locally, we have clients selling freezer beef to fill this demand. Customer satisfaction is high, and additional profits of $300/head are common, with some near $500/head.

Of cattle fed in the U.S. in 2008, 1.8% went into an “organic” or “all-natural” market. If that program works for you, that’s fantastic. But if that isn’t your market and you aren’t implanting calves in the suckling phase, you’re losing 20 lbs. of weaning weight.

If you figure your hourly wage of implanting calves, it’s about $2,000/hour. I can think of few things you can do legally to make such profit.

If you’re making less than $100/cow/year, investigate whether one of these strategies can add extra value to your calves. Then, next year, add another, and keep adding to your list until you’re producing the profit you deserve.

W. Mark Hilton, DVM, is a clinical associate professor of beef production medicine at Purdue University.